In a significant ruling to help layman to understand the Goods and Services Tax (GST), the Central Information Commission (CIC) has ordered the CPIO, GST Council, New Delhi to provide the information regarding the relevant GST Rules/Notification on the taxability of the amount received as incentive by Civil Government Contractor.
The Appellant, Mr. Anil Khanna filed an RTI application dated 27.03.2021 with CPIO, GST Council, New Delhi seeking the information regarding percentage on the amount received as incentive which needs to be payable to GST Department (Delhi) by him as a Civil Government Contractor.
The CPIO rejected the application by holding that if the Appellant has any grievance/doubt regarding this issue pertaining to incentive/consideration he may knock the doors of competent adjudicating authority of GST so constituted to deal with such issues. Upon Commission’s instance, he further clarified that under GST , there is no concept of an incentive rather a related term is in place i.e. ‘consideration’; and for which he agreed to provide a copy of the relevant extract of notification to the Appellant which may suffices the information sought for.
Information Commissioner Saroj Punhani held that “by taking a liberal view in the matter and also in furtherance of hearing proceedings the Commission hereby directs the CPIO to provide an extract of a copy of relevant rules/notifications pertaining to ‘consideration’ which will suffices the information sought by the Appellant regarding percentage on amount received as incentive which needs to be payable to GST Department (Delhi) by him towards GST Tax. The above said information should be provided by the CPIO free of cost to the Appellant within 15 days from the date of receipt of this order under due intimation to the Commission.”
“A pertinent issue emanating from the instant case and similar nature of cases dealt with by this bench in the recent past is that a number of RTI Applications are being filed for seeking clarifications on various policy/ procedure matters of Public Authorities with regards to the applicant’s grievances for any claim as per their Rules/Notifications/Orders. It will be in the best interest of Respondent Public Authority to explore the viability of introducing/updating a FAQs Section on their website wherein the most commonly sought issues/clarifications and/or respective orders/circulars/their jurisdictions and also their powers/roles can be easily identified and relevant information in that regard can be placed in the public domain in keeping with the letter and spirit of suo motu disclosures prescribed under Section 4 of the RTI Act. This will also relieve the public authority from the burden of RTI Applications which are filed for merely seeking clarifications and not any specific record,” the CIC said.
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The Direct General of Foreign Trade (DGFT) has extended the export of consignments of broken rice till 30th September 2022. Earlier, the last date was September 15, 2022, as mentioned in Notification No. 31 dt. September 08, 2022. As per the notification issued today, “The Central Government, in the exercise of powers conferred by Section 3…
In a recent ruling a five-judge constitutional bench led by Justice Indira Banerjee refused to deliver an opinion relating to the controversial sale tax levy on the product “pan masala” stating that a unanimous Judgment did not have more precedential value than a Judgment delivered by a Bench of the same strength where one or more Judges dissented.
In a judgment on September 19th, 2022, the bench comprising Justice Indira Banerjee, Justice Surya Kant, Justice M.M. Sundresh and Justice Sudhanshu Dhulia observed that “In view of Article 145(5) of the Constitution of India concurrence of a majority of the judges at the hearing will be considered as a judgment or opinion of the Court. It is settled that the majority decision of a Bench of larger strength would prevail over the decision of a Bench of lesser strength, irrespective of the number of Judges constituting the majority.”
The petitioner, M/s Trimurthi Fragrances (P) Ltd contended that the Delhi Lieutenant Governor incorrectly issued a notification under the Delhi Sales Tax Act, 1975, imposing sales tax on ‘Pan Masala and Gutka’ when Tobacco products were exempt from sales tax under the same Act.
In the 2017 Judgment referring the case to a Constitution Bench, Justices R.F. Nariman and S.K. Kaul stated there was a ‘head-on conflict’ between the SC’s decisions in Kothari Products Ltd. v Govt of Andhra Pradesh (2000) and Commissioner, Sales Tax, Uttar Pradesh v Agra Belting Works (1987).
In Kothari Products, the SC held that Pan Masala and Gutka should be exempt from sales tax as they were Tobacco products. In Agra Belting Works, the Court held that if there is a conflict between an exemption and sales tax imposed on a good, it would imply that the Legislature intends to withdraw the exemption provided to that good.
“The conclusion (1) is that a decision delivered by a Bench of largest strength is binding on any subsequent Bench of lesser or coequal strength. It is the strength of the Bench and not number of Judges who have taken a particular view which is said to be relevant. However, conclusion (2) makes it absolutely clear that a Bench of lesser quorum cannot disagree or dissent from the view of law taken by a Bench of larger quorum. Quorum means the bench strength which was hearing the matter,” Justice Hemant Gupta said.
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The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench has allowed a provisional assessment requested by the assessee in order to claim excise duty deduction towards discount provided to dealers at the time of clearance of goods from depot.
The respondent, J K Tyres was aggrieved by the order rejecting request for provisional assessment and claimed that the factum of availability of these discounts was known to the dealers before clearance of the goods but on account of the very nature of the discounts, the same cannot be quantified when the goods are sold from the depots to the dealers and quantification of these discounts is done at a later point of time. It is for this reason that the respondent made a request for provisional assessment for the financial year 2017-18.
The department issued a show cause notice to the respondent for the financial year 2017-18 and later rejected the request for provisional assessment. Feeling aggrieved, the respondent filed an appeal before the Commissioner (Appeals), who allowed the appeal after placing reliance upon the Board Circular dated June 30, 2016. The department approached the Tribunal for relief.
Relying on the past orders wherein similar issues were adjudicated, the Tribunal comprising Justice Dilip Gupta, President and Mr. P.V.Subba Rao, Member (Technical) observed that though the availability of the discounts was known at the time of clearance of the goods, these were quantified later but are to be deducted from transaction value.
The Tribunal, in the earlier order, held that “at the time of clearance of goods, since there is no quantification of demand, provisional assessment needs to be resorted to. This is also in line with the Board’s Circular dated 30.06.2000. Thus, we are of the opinion that rejection of the request for provisional assessment was incorrect and unsustainable in law and the learned Commissioner (Appeals) has rightly set aside the order passed by the learned Assistant Commissioner, rejecting the request for provisional assessment.”
Relying on the above orders, the Tribunal held that “the two decision of the Tribunal, on which reliance has been placed by learned authorized representative appearing for the department, would not be applicable in the present case as they do not deal with discounts which though known at the time of clearance of the goods cannot be quantified at that stage and are quantified later.”
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The Institute of Chartered Accountants of India (ICAI) has issued Exposure Draft Standard on Sustainability Assurance Engagements (SSAE) 3000 Assurance Engagements on Sustainability Information.
Sustainability Reporting Standards Board (SRSB) of the Institute of Chartered Accountants of India (ICAI), issues Standard on Sustainability Assurance Engagements (SSAE) 3000 Assurance Engagements on Sustainability Information pursuant to the legislative provisions explained below. ICAI is a statutory body established by an Act of Parliament under the Chartered Accountants Act, 1949.
The Sustainability Reporting Standards Board (SRSB) formulates this Standard on Sustainability Assurance Engagements (SSAE) 3000 Assurance Engagement on Sustainability Information.
This Standard on Assurance Engagements draws reference from International Standard on Assurance Engagements ISAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board of the International Federation of Accountants (IFAC).
“Your comments on this Exposure Draft Standard on Sustainability Assurance Engagements (SSAE) 3000, “Assurance Engagements on Sustainability Information” should reach us by October 3, 2022. Comments are most helpful if they indicate the specific paragraph(s) to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording. The comments should be mailed at sustainability2022@icai.in,” the Institute said.
The last date for submitting the comments is 3rd October 2022.
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The Income Tax Appellate Tribunal (ITAT), Delhi bench has, while deleting an addition under section 69A of the Income Tax Act, 1961 has held that the cash gift from brother and sister cannot be treated as “unexplained.” The assessee, Ms. Ritu Jain contended that in view of the ill health of her husband, assessee’s sister…
In a significant ruling, the Rajkot bench of the Income Tax Appellate Tribunal (ITAT) has held that as a relief to small taxpayers, maintaining books u/s 44 AD of the Income Tax Act,1961 is not required for small businesses and deleted the addition.
The A.O. reopened the case of assessee u/s 148 of the Income Tax Act on information that the assessee had deposited 18,66,000/- in his ICICI Bank account at the Porbandar Branch. The assessee claimed to have returned income on a presumptive basis on his business carried out as per the provisions of section 44AD of the Act.
The entire cash deposits were treated as unexplained and added to the income of the assessee as the assessee failed to furnish any evidence to prove the source of the cash deposit. CIT(A) upheld the findings of the A.O. as the assessee had been unable to substantiate the source of cash deposits from the turnover of his business.
It was evident that small businessmen were not required to maintain books of accounts as per Section 44AD of the Act and were difficult for the assessee to produce bills to substantiate his turnover in cash that too after a lapse of six years. The Tribunal held that the entire deposits of Rs. 18,66,000/- in cash in the bank can be safely attributed to the business receipts of the assessee only.
Ms Annapurna Gupta, Accountant Member and Shri TR Senthil Kumar, Judicial Member deleted the addition of Rs. 18,66,000/- on account of an unexplained cash deposit and the appeal filed by the assessee got allowed. The respondent was represented by Shri B.D. Gupta.
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The GST Council’s 47th meeting was held in Chandigarh on 28th and 29th June, 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman has reduced the GST Rate on Various Goods and Services.
B. Other GST rate changes recommended by the Council
| S. No. | Description | From | To |
| Goods | |||
| 1 | Ostomy Appliances | 12% | 5% |
| 2 | Orthopedic appliance- Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; intraocular lens | 12% | 5% |
| 3 | Tetra Pak (Aseptic Packaging Paper) | 12% | 18% |
| 4 | Tar (whether from coal, coal gasification plants, producer Gas plants and Coke Oven Plants. | 5%/18% | 18% |
| 5 | IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme | 5% | Nil |
| 6 | Cut and Polished diamonds | 0.25% | 1.5% |
| 7 | IGST on specified defence items imported by private entities/vendors, when end-user is the Defence forces. | Applicable rate | Nil |
| Services | |||
| 1. | Transport of goods and passengers by ropeways. | 18% | 5% (with ITC of services) |
| 2 | Renting of truck/goods carriage where cost of fuel is included | 18% | 12% |
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The Income Tax Appellate Tribunal (ITAT), Mumbai has held that, Subsidy received as an octroi duty refund is a capital receipt and not chargeable as tax.
Assessee Company, Sudal Industries Limited is engaged in the business of manufacturing and selling aluminum extrusion and alloys. It filed its return of income on 30th November 2013 at a loss of ₹42,03,160/-. The return of income was picked up for scrutiny and assessment order under Section 143(3) of the income tax Act, 1961 (the Act) was passed on 17th March 2016 at ₹5,76,15,590/-. The assessee also disclosed the book profit under Section 115JB of the Act, at a loss of ₹1,42,11,185/- which was adjusted to derive a book profit of ₹4,86,81,823/-.
The assessee received a State Government subsidy for the expansion of capacity in the form of an Octroi duty refund of ₹ 2,10,50,620/-. The above sum has been directly added to the capital reserve and not routed through the profit and loss account. The Assessing Officer held that during the year, the assessee has paid octroi of ₹1,75,63,594/- and got an incentive of ₹1,32,07,000/-. Accordingly, the Assessing Officer made the addition of the Government grant of ₹1,32,07,000/- as business income and did not accept that same as capital receipt.
Aggrieved the assessee filed an appeal before the Commissioner of Income Tax (CIT). CIT confirmed addition with respect to the Government grant of ₹1,32,07,000/-, he held that the Government grant is given for payment of Octroi duty, originally paid by the assessee which is refunded by the Government. Therefore, it cannot be termed a capital receipt. Accordingly, the CIT upheld the action of the learned Assessing Officer.
The bench consisting of Prashant Maharishi, Accountant Member, and Pavan Kumar Gadale, Judicial Member held that “ the subsidy received by the assessee in the form of octroi duty refund of ₹ 132,07,000/– is a capital receipt not chargeable to tax.”
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The Goods and Services Tax (GST) Council under the supervision of the Union Minister Nirmala Sitharaman to meet on 28th June and 29th in order to discuss the possibilities of revising the tax rates of certain goods and services and the tax slabs.
The Official Twitter handle of Finance Minister Nirmala Sitharaman’s office tweeted that “The 47th meeting of the GST Council will be held on June 28-29, 2022 (Tuesday & Wednesday) in Srinagar.”
This meeting comes against the backdrop of the much-debated recent Supreme Court decision on the Goods and Services Tax (GST). Further, the compensation cess arrangement with the states is also slated to end. So, this GST Council meeting is critical for the very future of GST.
Also, the Group of Ministers (GoM) tasked to review the GST levy on casinos, race courses and online gaming has finalised its report and has unanimously decided on hiking the tax rate on these services to 28 percent. At present, services of casinos, horse racing and online gaming attract 18 percent GST.
Besides, according to sources, “The GoM is likely to discuss the proposal to shift rate slabs from current 5 percent to 7 percent or 8 percent and the 18 percent slab to 20 percent.”
Also on the agenda of the GoM is to “prune the list of exemptions which can be continued under GST, correction of inverted duty structure wherever needs, especially to give a nuanced look at the textile sector,” sources added.
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The Central Board of Indirect Taxes and Customs (CBIC) has waived the interest rate on account of the non-filing of GSTR-8 by certain e-commerce operators under section 52 of the Central GST Act, 2017.
Section 52 of the CGST Act, 2017 provides for Tax Collection at source, by e-Commerce operator in respect of the taxable supplies made through it by other suppliers, where the consideration in respect of such supplies is collected by him.
As per the notification issued on Tuesday, electronic commerce operators having the prescribed Goods and Services Tax Identification Numbers who could not file the statement under sub-section (4) of section 52 of the said Act, for the month of December 2020, by the due date, due to technical glitch on the portal but had deposited the tax collected under sub-section (1) of section 52 for the said month in the electronic cash ledger, interest will not be charged from the date of depositing the tax collected under subsection (1) of section 52 of the said Act in the electronic cash ledger till the date of filing of the statement under sub-section (4) of section 52.
The notification stated that “In exercise of the powers conferred by sub-section (1) of section 50 read with section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby notifies the rate of interest per annum to be ‘Nil’, for the class of registered persons mentioned in column (2) of the Table given below, who were required to furnish the statement in FORM GSTR-8, but failed to furnish the said statement for the months mentioned in the corresponding entry in column (3) of the said Table by the due date, for the period mentioned in the corresponding entry in column (4) of the said Table.”
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The Central Board of Direct Taxes (CBDT) has issued a circular clarifying the rules regarding Form No. 10AC under the Income Tax Act, 1961 and the connected rules. Finance Act, 2022 has inserted sub-section (4) in section 12AB of the Income-tax Act, 1961 allowing the Principal Commissioner or Commissioner of Income-tax to examine if there…
The Maharashtra Advance Authority for Ruling (AAR) bench consisting of Rajiv Magoo, Additional Commissioner of Central Tax, and T R Ramnani, Joint Commissioner of State Tax held that GST is not leviable on Fees collected for training in respect of Football, Basketball, Athletics, Cricket, Swimming, Karate, and Dance.
The applicant, M/s Navi Mumbai Sports Association is a Non-Government Sports Organization and Public Charitable Trust registered under The Societies Registration Act, 1860 and The Bombay Public Trust Act, 1950. The Association holds a valid registration under section 12AA of the Income Tax Act, 1961. An International Sports complex was constructed by the association on the land allotted to it by M/s CIDCO. The main aim and object of the Association are to encourage and foster sports, and cultural and social activities. The sports complex is equipped with various facilities for achieving its objectives, which include indoor badminton, squash, table tennis courts, gym, health club, retiring rooms, football and cricket ground, swimming pools, restaurants, conference halls, etc. The Applicant, with a view to promoting their objectives, provides training/coaching on basic/advanced courses to members and non-members for various sports activities such as badminton, table tennis, squash, swimming, cricket, basketball, football, dance, etc, and charges fees for the same.
The AAR observed that “football, basketball, athletics, cricket, swimming, and karate are sports, and “dance” would be covered under arts. However, physical fitness cannot be considered a sport, art, or culture. Further, the term “summer coaching” is a general term which cannot cover sports, arts, or culture. We find that training and coaching in football, basketball, athletics, cricket, swimming, karate, and dance by the applicant would be covered under Entry No. 80 of notification 12/2017-CTR dated June 28, 2017, as amended, and “physical fitness” training and “summer coaching” are not covered under the said Entry No. 80 mentioned above. Therefore, the benefit as per Entry No. 80 of notification 12/2017-CTR dated June 28, 2017, as amended will be available to the applicant only in respect of training and coaching in respect of football, basketball, athletics, cricket, swimming, karate, and dance.”
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The Institute of Chartered Accountants of India (ICAI) has issued a notification for Online Assessment Test (AT) for Certificate Course on Wealth Management and Financial Planning on the following date through Digital learning Hub Organized by Committee for Members in Practice of ICAI.
As per the notification, an active ICAI membership number, Completion of the Eligibility Criteria (80%attendance in the virtual Professional Training), Desktop/ Laptop with good internet connectivity, Camera attached with Desktop/ Laptop, Active login at Digital Learning Hub of ICAI (ICAI Digital Learning Hub) (Please note SSP Login credentials are used), Completion of Face Registration Activity at ICAI Digital Learning Hub by 1:30 PM of 4 Days before date of Exam are essential for the exam.
The candidates also need to ensure that your recent photo is uploaded on your SSP dashboard. Launch of the Assessment enables Face Authentication to confirm liveliness (Blink of eyes).
The online Assessment Test (AT) for Certificate Course on Wealth Management and Financial Planning is scheduled to be held on 11 June 2022 (Saturday) on the above date from 11:00 A .M. to 01.00 P M I S T . through Digital Learning Hub of ICAI.
“Members are required to ensure that they are able to login in the Digital Learning Hub of ICAI (ICAI Digital Learning Hub)using their SSP Portal credentials. Please check this latest by 4 Days before date of Exam and in case of any issue with the login, please write to us at training.cmp@icai.in and sangeetha.jaganathan@icai.in we would not be able to help any member if they are not able to login at the day of the Assessment Test,” the notification said.
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The Income Tax Appellate Tribunal (ITAT), Delhi bench, while quashing an assessment under the Income Tax Act, 1961, has held that the income tax addition cannot be based on the conjectures and surmises. During the course of assessment proceedings, the Assessing Officer asked the assessee, Mr. Kuldeep Katiyar to submit documents in order to verify…
A division bench of the Supreme Court has held that the levy of IGST on the importers as per the notifications of the Central Board of Indirect Taxes and Customs (CBIC) is in violation of Section 8 of the CGST Act.
The bench was considering an appeal filed by the Revenue against the Gujarat High Court order allowing a petition by Mohit Minerals Pvt Ltd challenged vires of the CBIC notification. The petition has principally three elements. First, having paid the tax under IGST Act on the entire value of imports (inclusive of the ocean freight), the petitioner cannot be asked to pay tax on the ocean freight all over again under a different notification.
The Apex Court observed that “On a conjoint reading of Sections 2(11) and 13(9) of the IGST Act, read with Section 2(93) of the CGST Act, the import of goods by a CIF contract constitutes an “inter-state” supply which can be subject to IGST where the importer of such goods would be the recipient of shipping service.”
“This Court is bound by the confines of the IGST and CGST Act to determine if this is a composite supply. It would not be permissible to ignore the text of Section 8 of the CGST Act and treat the two transactions as standalone agreements. In a CIF contract, the supply of goods is accompanied by the supply of services of transportation and insurance, the responsibility for which lies on the seller (the foreign exporter in this case). The supply of service of transportation by the foreign shipper forms a part of the bundle of supplies between the foreign exporter and the Indian importer, on which the IGST is payable under Section 5(1) of the IGST Act read with Section 20 of the IGST Act, Section 8 and Section 2(30) of the CGST Act. To levy the IGST on the supply of the service component of the transaction would contradict the principle enshrined in Section 8 and be in violation of the scheme of the GST legislation. Based on this reason, we are of the opinion that while the impugned notifications are validly issued under Sections 5(3) and 5(4) of the IGST Act, it would be in violation of Section 8 of the CGST Act and the overall scheme of the GST legislation,” the Court said.
“We are in agreement with the High Court to the extent that a tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed,” the Court added.
Concluding the order, the Apex Court held that “the impugned levy imposed on the ‘service’ aspect of the transaction is in violation of the principle of ‘composite supply’ enshrined under Section 2(30) read with Section 8 of the CGST Act. Since the Indian importer is liable to pay IGST on the ‘composite supply’, comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of Section 8 of the CGST Act.”
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The Supreme Court in in Union of India v. Mohit Minerals, has held that the foreign exporter cannot claim input tax credit (ITC) in India as per the provisions of section 12 of the Integrated GST Act, 2017. The respondent-assessee have argued that the possibility of two different recipients of services would create absurdities since…
The Allahabad High Court has stayed the GST demand on payment of royalty to conduct mining activity.
The petitioner/assessee challenged the First Appeal Order arising from the earlier order under Section 73 of the U.P. GST Act, 2017.
The petitioner has also challenged the ex parte order passed by the State GST authorities pursuant to a notice. Both proceedings were stated to be for the same tax period, being Financial Year 2017-18.
The petitioner contended that no GST liability could arise from the payment of a royalty to conduct mining activity. The petitioner has relied on the decision of the Supreme Court in the case of A.D. Agro Foods Pvt. Ltd. Vs. Union of India in which the payment of GST for grant of mining lease/royalty by the petitioner was stayed.
Justice Saumitra Dayal Singh observed that “Matter requires consideration, both on the issue of liability to pay GST and royalty as also as to jurisdictional error in the second proceeding for the same tax period.”
The Court granted six weeks’ time to file counter affidavit to the department as prayed by the Standing Counsel. Petitioner shall have two weeks’ thereafter to file rejoinder affidavit.
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In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi bench has deleted the addition based on the cash deposit made in a fake bank account created using the id proof of the assessee.
While challenging the income tax addition made by the department, the assessee contended that the Savings bank account No.623010014000 in the ING Vaisya Bank Ltd., Siddhartha Colony, Muzaffar Nagar branch does not belong to her and it was not opened in the name of her, Smt. Asha Saini, but was opened in the name of Smt. Asha Rani, a resident of 677, Laddhawala, Muzaffar Nagar.
The department contended that there is no iota of any evidence that the amount deposited in the impugned bank account was ever withdrawn or utilized by the appellant or diverted to the other bank account of any relative, person, friend or family member.
Shri Chandra Mohan Garg, Judicial Member observed that “I decline to accept contention of the authorities below that the impugned bank account with ING Vaisya Bank Ltd., belongs to the assessee and it was opened by the assessee by using her identity and residential proof. Therefore, I am compelled to hold that no addition can be made in the hands of the assessee on the instance of such bank account which has been disowned by the appellant.”
Quashing the assessment order, the Tribunal added that “It is pertinent to mention that the bank account has been opened in the name of Smt. Asha Rani whereas the name of present appellant is Smt. Asha Saini. So far as similarity in the address is concerned, when the identity and residential proof of the assessee has been misused by the culprits, then it is obvious that the actual address would match with the address mentioned in the bank documents, but this fact does not wipe out the other substantial evidences placed on the record by the appellant. Therefore, addition made by the Assessing Officer and confirmed by the ld. CIT (Appeals) stands deleted.”
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The Karnataka High Court has declared that there is no conflict between the power to levy GST under GST Act and power of Municipal Corporation to levy advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.
Advocate Zameer Pasha for the petitioners contended that on the enactment of the Goods and Service Tax Act (GST), the authority of the respondents to either levy or collect advertisement tax is ousted. Therefore, there could be no demand for advertisement tax post the enactment of the GST.
Further, the respondents have collected the advertisement tax in terms of Section 134 of the Karnataka Municipal Corporations Act, 1976. The power under Section 134 of the KMC Act flows from Entry 54, List II of Schedule VII of the Constitution of India. The said Entry 54 having been deleted the said power is divested. Hence, even on that ground no advertisement tax could be levied.
The GST Act has been introduced pursuant to 101st amendment to the Constitution which among other things has introduced Article 246(A) to the Constitution. The GST Act has been introduced with the intention to simplify the process of collecting indirect taxes. The indirect taxes like excise duty, sales tax, service tax, etc., have been subsumed in the GST Act wherein GST is levied on the supply of services and or goods.
With regard to the above contentions of the petitioners, Justice Suraj Govindaraj observed that “If so done there is double taxation which is impermissible and that on coming into force of the GST Act, it is only GST which is applicable to the petitioners and no advertisement tax is liable to be paid.”
Noting the fact that the GST as stated above is levied on any supply of goods or services, the Court observed that the petitioners supplying services and or goods, on the invoice that the petitioners were to raise on their respective clients the invoice amount would be required to be accompanied by a GST amount on the basis of the categorization of services and or goods under the GST Act. The said GST collected from the client of the petitioners, the amount is required to be remitted by the petitioners to the GST authorities.
“In this transaction the petitioners are only a collecting agency who collects the GST payable on the service rendered and deposits the same with the authorities, the incidence of tax, i.e., GST being on the services rendered or goods supplied, the obligation of payment being on the person availing the service and or receiving the goods,” the Court said.
“The incidence of GST is on the service rendered by the petitioner to its clients and has nothing to do with respondent No.2-HDMC. The transaction with HDMC is the permission and or license granted by the HDMC to put up hoarding and or use a hoarding either on the land belonging to the HDMC and or on land belonging to a private party. The incidence of advertisement tax or advertisement fee is on the license granted by HDMC permitting the petitioner to put up hoarding or make use of the hoardings, this incidence of advertisement tax or fee has nothing to do with supply or service or goods by the petitioner to its clients,” the Court said.
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